Johnson v. Rocky Mountain Fire Ins. Co.
| Citation | 226 P. 515,70 Mont. 411 |
| Decision Date | 15 May 1924 |
| Docket Number | 5453. |
| Parties | JOHNSON v. ROCKY MOUNTAIN FIRE INS. CO. |
| Court | United States State Supreme Court of Montana |
Appeal from District Court, Cascade County; H. H. Ewing, Judge.
Action by Daniel Johnson against the Rocky Mountain Fire Insurance Company. Judgment for defendant, and plaintiff appeals. Reversed with directions to grant new trial.
O'Leary & Doyle, of Great Falls, for appellant.
Cooper Stephenson & Hoover, of Great Falls, for respondent.
This action is based upon two policies of fire insurance issued by the defendant to the plaintiff, one for $1,500 dated May 26 1921, covering the buildings located upon lots 5 and 6 in block 11, town site of Montague, and the contents thereof, as follows: $700 upon the buildings and $800 upon the contents the other for $500, dated January 21, 1922, covering a piano located in one of the buildings covered by the first policy. Practically all of the insured property was destroyed by fire on April 2, 1922. The defendant having refused to pay under the policy, plaintiff brought this suit to recover the amount of his loss.
The policies are the "standard" form, and each contains the following clause:
"This entire policy, unless otherwise provided by agreement indorsed herein, or added hereto, shall be void * * * if the subject of the insurance be a building on ground not owned by the insured in fee simple, or if the subject of the insurance be personal property and be, or become incumbered by a chattel mortgage."
Each policy also contains the usual provision to the effect that, if fire occur, the insured shall give immediate written notice to the company of any loss sustained thereby, and shall also, within 60 days after the fire, render to the company a written and verified statement containing certain specified information, commonly referred to as "proofs of loss."
At the time the first policy was issued the title to lot 6 mentioned therein was vested in the plaintiff and his wife, Rosa Johnson. The title to lot 5 then stood in the name of the Milwaukee Land Company and so remained until June 15, 1921, when the company conveyed the same to plaintiff and his wife; the deeds conveying title of both these lots to plaintiff and wife were recorded on July 18, 1921. The plaintiff did not give defendant written notice of the occurrence of the fire, nor did he at any time furnish the company with the "proofs of loss" as required by the terms of the policies.
All of the foregoing facts are made to appear in the two causes of action set out in the plaintiff's complaint, which contains further allegations of facts whereby it is sought to show that defendant waived the condition of the policy relating to plaintiff's ownership of the lots upon which the insured buildings were located, and also waived written notice of the occurrence of the fire and the furnishing of proof of loss under each of the two policies.
By appropriate averments in its answer the defendant raised issue upon the questions of waiver pleaded in the complaint, and denied liability under the $1,500 policy by reason of plaintiff's breach of conditions contained therein as to the ownership of the lots upon which the insured buildings were located, and his failure to give immediate notice of the occurrence of the fire and to make proofs of loss. The answer further alleges that on December 10, 1921, plaintiff executed and acknowledged a chattel mortgage covering all of the insured personal property to secure a note for $600 given to his wife, which mortgage was filed in the office of the clerk of the proper county on December 14, 1921, and that by reason thereof the $1,500 policy became void, and that the $500 policy was void at the time of its issuance and no recovery can be had upon either.
In reference to the chattel mortgage the plaintiff by reply alleged, in substance, that the same never became a valid or subsisting lien upon the property therein described and therefore did not violate the mortgage clause in the $1,500 policy; that the same was on file in the office of the clerk of the proper county when the $500 policy was issued and sets out facts in connection therewith similar to those contained in the complaint relative to the issuance of the $1,500 policy, and claimed that thereby defendant waived the mortgage clause in the $500 policy.
The case was tried before a jury. At the close of all of the testimony the court directed a verdict in favor of the defendant, upon which judgment was rendered. The plaintiff made a motion for a new trial, which was denied, and this appeal is prosecuted from the judgment.
The primary question presented is whether the court erred in directing a verdict in favor of the defendant, and this involves a determination of the following propositions:
(1) Whether there was any competent evidence tending to establish that the defendant waived the provisions of the first policy to the effect that the same should be void unless the plaintiff owned the lots upon which the buildings were located, in fee simple.
(2) The effect on that policy of plaintiff's subsequent execution of the chattel mortgage upon the personal property covered thereby.
(3) Whether, if the policy was not void ab initio, but its validity was affected by the chattel mortgage, the items thereof are severable, so that the policy was void in part and valid in part at the time of the fire.
(4) Whether there was evidence tending to establish that the defendant waived the clause in the second policy providing that it should be void if the piano thereby insured was mortgaged.
(5) Whether there was evidence tending to establish that the defendant waived the provisions of the policies in reference to giving immediate written notice of the occurrence of the fire and the furnishing of proofs of loss.
(1) That the plaintiff never owned lots 5 and 6 of block 11 in fee simple; that he was the sole owner of the buildings located on said lots and had an insurable interest therein; that he made no written application for the $1,500 insurance policy; that no officer or agent of the company asked him any questions concerning the title to the lots upon which the buildings covered by the policy were located; that he made no representations whatever concerning his title to these lots; that prior to the issuance of the policy an officer of the bank which, as agent, issued the same, examined and went over the property to be insured and was entirely familiar with the same; that the clause in the policy with reference to title was not called to plaintiff's attention when the policy was issued and delivered to him and that he did not know about the same; that the plaintiff paid and defendant accepted and retained, and has not offered to return, the premium upon this policy, are facts which stand uncontradicted in the record.
Whether, under circumstances like these, an insurance company is liable under a policy containing the provisions and stipulations embraced in the one under consideration, is a question upon which the authorities are far from unanimous. This divergence of opinion is well stated in 14 R. C. L. page 1186, as follows:
In notes to this text a large number of cases are collected supporting the two theories.
In the case of Wright v. Fire Insurance Co., 12 Mont. 474 31 P. 87, 19 L. R. A. 211, this court adopted the doctrine which is announced in the first sentence of the paragraph above quoted. The opinion of Mr. Justice Harwood in that case sets out very clearly the principles upon which the ruling is based, and we see no reason why it should be departed from. Upon the authority of that case we hold that, since plaintiff had an insurable interest in the building when the policy was issued and the defendant did not require a written...
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